Food

Review of the year

Food delivered a strong performance improvement as a result of increased storage levels which supported a higher level of pallet throughput. As planned, the new business gained from existing and new accounts required the utilisation of overflow warehousing throughout the year. This was managed efficiently with a high level of service maintained for customers and additional costs to the business effectively controlled.

The increased demand from customers supported the investment in the new warehouse at Lymedale, signed and announced in January 2024, with the fit-out commencing immediately and progressing in line with its business plan to be partially operational by 31 May 2024 (and fully operational by early autumn of this year) to support the future growth of the business.

Revenue increased by 9.6% to £77.7 million (2023: £70.9 million). Storage utilisation overall was at an average of 137,000 pallets (2023: 122,000 pallets), with warehouses effectively utilised across the year. Demand for our customers’ products increased in spite of food inflation continuing through the year. Throughput was 6.0% higher than prior year, whilst storage levels were up 12%, highlighting a positive overall increase in the stock turn of our customers’ products.

As a result of the Lymedale investment, the capacity of the Food business will increase by 52,000 pallets to a total of 187,000 owned pallet spaces, supporting strategic growth and ongoing demand from its customers for ambient grocery consolidation and distribution. The Group's capacity was 100,000 pallet spaces prior to the opening of the Crewe warehouse in 2020.

The pipeline of new business from existing and new accounts continues to be strong and provides confidence in the prospects for the business. We continue to look for opportunities to service this customer demand, whether through further additional warehouse facilities or through targeted acquisitions.

Headline operating profit was £3.7 million (2023: £4.2 million). This included the ramp-up costs of £1.7 million in respect of the opening and fit out of the new warehouse at Lymedale.

Demand for our customers’ products continues to be stable and the outlook for most product categories handled by the business is resilient. The business operates in a competitive supply chain and needs to continually demonstrate the value and service that it provides to food manufacturers and importers. We are a leading specialist in consolidating ambient grocery products in the UK, with high service levels, industry leading systems and a consistent operating performance being the key components of the customer proposition.